AMA calls for urgent Government action on junk policies

The community is losing faith in private health insurance, with health funds offering too many “junk” policies that provide no cover when people need it, AMA President Dr Michael Gannon says.

The AMA has called on the Government to legislate to ensure that all policies have a minimum level of cover, appropriate to the age of the person taking out the policy.

“Private medicine is under siege and, in many ways, that’s because, very quickly, the community is losing faith with their private health insurance, which underpins most visits to private hospitals,” Dr Gannon told ABC AM.

“We seem to be seeing an orchestrated campaign by the insurers – an industry which is increasingly a for-profit industry – to deflect the blame from the real problems, and the real problems are that patients are getting sick and tired of finding out when they’re sick that their insurance isn’t good enough.”

Almost 35,000 people dropped their hospital cover between March and June this year, latest figures show. More than half (17,685) were in the 20 to 24 age group.

The slide coincided with an average 4.84 per cent premium rise in April – three times the inflation rate – and a 15.5 per cent rise in health funds’ net profits in the 2016-17 financial year.

While the AMA is part of the Private Health Ministerial Advisory Council (PHMAC), which is due to report by the end of the year, Dr Gannon says enough is known about junk policies for the Government to act now.

“There are people who have carefully, dutifully, responsibly put aside money for private health insurance, over many years in many cases, and then when they get sick they find they’re not covered,” he said.

“Policies for people over the age of 60 that exclude them from having their hips or knees fixed, or having their eyes fixed, are silly.

“We’ve a proliferation of junk policies which are worth nothing more than the paper they’re written on, and are purely designed so people avoid the tax penalty.

“The Government has the power to legislate — to make sure that [the policies] are worthwhile for people who take them out.”

Dr Gannon rejected a call by former Health Department head, Professor Stephen Duckett, for doctors to be forced to publish their fees.

He conceded that doctors could do better when it comes to providing information, but said patients should make better use of their general practitioner.

“They get to know you, they get to know which specialists might fit with your personality, which specialists bulk bill, which specialists work in which hospitals, which operations can be done where.

“They know this information, and if you really want to talk about value in the health system, it’s having a good relationship with your GP.

“A lot of the time, a good GP will save you a visit to the specialist to start with, and a lot of the time they’ll work out who the right specialist for you is.”

The AMA’s submission to the Senate Value and Affordability of Private Health Insurance and Out-of-Pocket Medical Costs in Australian Health Care inquiry points out that medical fees make up just 16 per cent of total benefit outlays for private health insurers, so it would take a substantial decrease in fees to have an effect on premiums.

But it argued that if doctors’ fees should be published in the interests of transparency, so should all components of private health insurance costs.

“Private health insurers, hospitals, and other key stakeholders should all provide details of costs to the system,” the submission said.

“This could include senior management remuneration and/or fully itemised hospital list of charges post-surgery, so the patient can see exactly how their insurance has supported them.”

The AMA is prepared to consider a proposal where specialists publicly reported on a Government website the fees they charge for the five most common procedures they carry out.